SEC Expands Knight Probe

Agency Said to Be Looking Broadly at Risk Controls; Board Voted for Settlement

By

Jenny Strasburg And

Scott Patterson

Updated Nov. 13, 2012 9:02 p.m. ET

The Securities and Exchange Commission has deepened its probe into whether Knight Capital Group Inc. did enough to police its trading systems before computer errors nearly destroyed the brokerage.

The inquiry, which began after Knight's errant Aug. 1 trades saddled it with more than $450 million in losses, initially focused more narrowly on what caused the errors. The probe has broadened to look further at the company's risk-control procedures and Knight's compliance with a rule implemented last year—called the...